Commentary and Tracking of a Portfolio of Stocks using approach from "The Little Book that Beats the Market" by Joel Greenblatt aka Magic Formula Investing

Thursday, December 21, 2017

Final Week For 12/31/16 Formula Tranche

Final Week For 12/31/16 Formula Tranche

Well, just a few trading days left on my MFI Formula tranche from 12/31/16. Always exciting. Reading through Tobias Carlisle's Deep Value book, he comments how many projections are better with just a formula. Even a formula with an expert reviewing the formula typically does not improve things.

Well, this is my formula. As regular readers know, my back testing has shown that if you (1) start with 50 stocks over $100m screen, (2) filter out the 33% smallest stocks and (3) then filter again for a 2.4% or greater dividend will give you very satisfactory results.

Here is the tranche coming up on anniversary:

12/30/2016

Start

Current

Dividend

Pct
Gain

R3K
Gain

GILD

$71.69

$73.02

$2.08

4.8%

20.5%

HPQ

$15.00

$21.25

$0.53

45.2%

20.5%

TGNA

$21.33

$24.11

$0.35

14.7%

20.5%

CA

$31.99

$33.51

$1.02

7.9%

20.5%

SYNT

$19.79

$24.92

$0.00

25.9%

20.5%

Totals

19.7%

20.5%

Looks like I will probably get edged out at the wire. But who knows? Then here are the stocks for upcoming pick. I show this just as an example of how the formula works... I will re run it 12/31 for the actual picks.

So 12 of the original 50 still in the running. I do, at this time, allow myself to throw out one "broken leg" stock should I care to do so. I will pass on that. So now I run a random number generator to get my five picks.